*** Treasuries rose Wednesday.......>

US TSYS SUMMARY: *** Treasuries rose Wednesday with 30Y bond, 10Y notes esp.

seeing buying; this was more striking as the $34B 5Y note auction drew only

so-so demand, though the $13B 2Y FRN reopening auction had reasonably good

demand (3.5bp discount margin; strong 62.7% indirects bids (vs Nov 49.6%); no

directs (vs Nov 6.27%), leaving small 37.3% for dealers.) 

- 5Y sale was somewhat soft: tailed roughly 1.6 bps to a 2.245% rate, 58.4%

indirects, 7.94% directs, 33.7% dealers, 2.36 cover; but buying came right

after.

- Tsys began NY weak then firmed in stealthy bid/short-cover. Tsy futures buying

in 10Y TYH8 from 123-20 to 123-20+ for 10,000 before 8:22am ET. Other markets:

natural gas leaping up 3% on the day, NYMEX crude oil -0.8%; copper hit multi-yr

highs.

- Tsys aided too by soft 122.1 Dec Conf Bd Consumer Confidence index, 0.2% NAR

Nov pending home sales; MNI poll median estim for Conf Bd Consumer Confidence

was 128. US swaps meanwhile had been tighter earlier, with US$170M receiver 5Y

swap at 2.29602%. LIBOR: 1m, 3m, 6M Libor all set higher in rate.